There is a lot of buzz in this space for the listed players like Ujjivan Small Finance Bank as well. Like every other small finance bank, it is in micro financing, offers loans to unorganized industries. We cannot compare Utkarsh and Ujjivan anyway but business is pretty much the same in small lens.
Let’s discuss pros and cons of applying the IPO !!
Pros:
- Attractive valuations
- Listed players also posted great results in the previous quarter
- Grey market premium is also signalling above 50% gains as of now
- Anchor list looks good
- Mainboard IPO, less risky
- Market is bullish which helps the GMP to stay tight !!
Cons:
- IPO size is so small and retail category is just 10% which is around 50 crores. Allotment chances are minimal.
- It is on SEBI radar regarding some regulatory and complaince issues.
- Looks like to get good response from the market participants, posted good results in the recent quarter by managing the provisions and increasing the overall PAT. Numbers looks dicey.
Conclusion:
If you have extra funds lying in the account, just apply for listing gains & try to exit on the day of listing. There is close to zero risk as GMP is more than 50%. No need to worry more about fundamentals since valuations are cheap and we are just applying for purely listing gain.
Downside risk is close to zero but anything can happen in the market overnight and change the overall sentiment. Have conviction on your bets.
Netweb Technologies IPO is inline from 17th July, stay tuned !!
